The $47B must include legacy costs.

They expect us to pay for the development, plant cost, etc. Then they are going to sell these wonder cars to us and then we have to pay for the technology AGAIN and give them profit. Why do I think there will be companies that won’t be at the begging bowl(Honda) that were smart with their profits(Toyota) and who have been working at meeting these CAFE regulations for some time already so they can sell even more cars when the time comes gaining even more market share(from GM and Ford, Chrysler will be history).

I’m tired of these companies that treat the government(taxpayers) as this never lose slot machine, and then expect consumers to be happy about shoveling out even more money .

That is ridiculous.

I looked at this report by the Department of Commerce: “The Road Ahead for the Automobile Industry” 2008 [PDF], and, “U.S. Automotive Industry Employment Trends” 2006 [PDF].

First the totality of the industry (the OEMs). In 2001, 17.1 million new vehicles (cars & light trucks) were sold in the US, of which 11.7 million were manufactured in the US. In 2007, the numbers were 16.1 and 10.5. This year they will be less. In 2001 the industry employed about 280,000 people down from 290,000 a few years before. In 2007, it was about 225,000.

I then looked at Honda, because they have new plants, no union contracts, and they just plain know what they are doing. They have published nice summaries of their North American operations.

Honda has the capacity to manufacture 1.8 million vehicles, from 12 Plants employing 25,000 workers. The plants cost almost $11 billion.

On that basis, a 12 million vehicle per year industry (assuming that we eventually get back to 2001 like numbers) would consist of about 80 plants and employ about 170,000 people and have a total cost of about $72 billion.

The $47B must include all costs for new plant in the US for the next 20 years. Either that or they are dumping their legacy costs including VEBAs, pension buy-outs and severance into the number.

Let’s see, who could pay for that? Well the automakers are clearly strapped, banks aren’t going to lend money, wall street is tapped out, sovereigns are too cautious. Who does that leave?

Someone with big pockets — big enough to afford $700M for a war in Iraq and $700B to bail out financial firms. Who could that be? You don’t think they are suggesting the American taxpayer, do you?